Weatherhead School of Management
MGMT 499: Strategic Issues and Application
Instructor: Sayan Chatterjee
Please read this document carefully -- especially the description of the online activities.
 The best way to reach me is through e-mail at sayan@case.edu.
 Please use Sub:499 in all emails. Write your name or your Group # in all assignment/exam
submission
 You will need your LAPTOP to take the exams.
Statement of Integrity:
You are expected to strictly adhere to academic integrity, particularly with regards to plagiarism. For any
individual course deliverables, you will not take any help or give any help on your honor. Only material
covered in the current course can be used.
Violation of the above will lead to a failing grade in the COURSE.
If you have seen any of the material before you need to tell me before taking the class. I will make
alternate arrangements without penalty.
Statement of Objectives
This course will help you understand the keys to successful strategic planning – the capabilities needed for
competitive advantage in each and every business of a firm. In particular, the course will help you
understand the following:


Competitive advantage in the 21st century
o Competitive advantage from capabilities (system of activities and resources)
 Critical capabilities vs. table stakes
 Firm must clearly understand the limits to growth of the core business
o Competitive advantage as ‘time-to-insight’ – identifying new possibilities faster than
competition, and moving on before they catch up with you
Positioning strategies– adapting to a market
o Analyze the industry environment in order to select the competitive battlefield to increase
the odds of success by leveraging your existing capabilities
Topics






Critical activities and key resources: Building blocks for a competitive business model
Business models that create competitive advantage for your business
Adapting to current conditions: Beating the industry and incumbents at their own game:
o Analyzing the competitive environment
o Assessing the attractiveness of the industry
o Isolating potential sources of competitive advantage and disadvantage
o Positioning strategies for your business
Techniques for changing the game: Identifying “white spaces” to shape an industry
Integrating analytical techniques from finance, accounting, information systems, marketing,
economics, organization theory and organizational behavior
Developing solutions and actionable plans
1
Description of Instructional Methodologies and Teaching Materials
The readings are conceptual, practitioner articles and my frameworks in Power Point. The cases are
competitive strategy issues faced by domestic and international firms. There are new and old cases but the
concepts are equally valid for today’s environment. Many cases are quite short but, irrespective, need a fair
amount of thinking. My primary instructional methodology will be Socratic Q&A and summary of key
takeaways. You can expect to be called upon at any point in the class. I will complement this with open
and small group discussion of focused issues and presentations by students. Please use your name card
always. You may not be recognized if you do not have your name card.
Class preparation involves not just case facts or the readings’ concepts. You need to apply the concepts as
widely as possible beyond the cases to your own experience. One technique I highly recommend is to read
a business article not as a story but as an application of the frameworks developed in class. This will not
only give you better insight but it is the best way I know for you to internalize the concepts.
Core framework -- clarity and choice: I take the following to be axiomatic. You succeed in a business
customer-by-customer. The core framework revolves around the following simple questions that most
companies do not take the time to answer clearly.

What do I need to do to compete?
o
This will be captured by your core internal objectives:


Basically you have to clearly define how you will deliver what the customer
wants (outcomes) as efficiently as possible
What can I do to deliver my objectives?
o
This will lead to an analysis of your capabilities:

This is the engine of your business model and you need to know how the parts
work and how you can refine these to increase the output

Capabilities are defined by your critical activities and key resources
You have to make a conscious effort at defining the objective as clearly as possible. Without clarity in
objectives, your odds of identifying the appropriate capabilities are very low. A large part of the class is in
developing this thinking process. The second factor that we will develop is how to see many choices for the
same opportunity. If you can identify more choices than your competition, you give yourself a chance to
succeed where others fail.
Pedagogy: The bulk of the learning will be through in-class interaction.
Participation: If you have thought through an issue and communicate that idea to the class it will be
relatively easy to get a good grade in participation. What I would like you to do is try to stay with the
discussion thread as much as possible. If you feel that that some new threads need to be introduced, use
your judgment because sometimes these are very valuable. I will sometimes take a comment outside the
current thread and discuss it as a sidebar but more often I will come back to it later.
Preparation: If you have not prepared the case then it is not a good idea to ‘wing’ it. Provided it is one
class session during the semester, just let me know if you are not prepared if I call on you. This brings me
to my style: I do call on class members, providing you the chance to share your ideas if you have not had an
opportunity before.
Seating Chart: I will distribute a blank seating chart to the class. Please enter your name on the chart,
helping me with the participation grade by sitting in the same seat for each class.
2
Course Material: Course material will be available as hard copy in a CWRU note for sale at the bookstore.
I reserve the right to add material with a week’s notice. This will typically be a current story that would
reinforce the learning.
Recommended Reading:


Failsafe Strategies: Sayan Chatterjee the first 6 chapters
Executing Your Strategy: How to Break It Down and Get It Done by Mark Morgan, William A.
Malek, Raymond Elliot Levitt – in particular Chapter 2 and Chapter 4
Exam: This will be one or more open book/notes in-class exam – you should use your laptop and e-mail
me the exam. You can only use materials used in the class. The exam will be on the honor system.
Violation of the honor system will lead to a failing grade in the class. I cannot change the exam schedule.
If you have a conflict then please take the other MGMT 499 that is being offered this summer.
Assignments: These will be group assignments (see course calendar)
Grading: Evaluation will be based on the following distribution. More than two absences during the course
will be detrimental to your class participation grade.
 Class participation: 20%
 Exam 1: 30%
 Project: 40%
 Group Assignments: 10%
3
Course Calendar:
These are hyperlinked to the Schedule below (in the word file –not in Blackboard).
Aug 26 Case Prep Only....................................................................................................... 5
Sep 9 Project Proposal Due............................................................................................. 6
Sept 9 .................................................................................................................................. 6
Sep 16 Group Assignment 1 Due.................................................................................... 6
Sep 16 Group Assignment 2 Due.................................................................................... 6
Sep 23 Case Prep Only ....................................................................................................... 7
Sep 30 Case Prep Only ....................................................................................................... 7
Oct 7
Group Assignment 3 Due ..................................................................................... 7
Oct 7 Case Prep Only.......................................................................................................... 8
Oct 14 Case Prep Only....................................................................................................... 8
Oct 21 Case Prep Only........................................................................................................ 9
Oct 21 First Draft Due .................................................................................................... 9
Oct 28 Take Anywhere Mid-Term Exam. ......................................................................... 9
Nov 4 Case Prep Only........................................................................................................ 9
Nov 11 Case Prep Only.................................................................................................... 10
Nov 18 Case Prep Only.................................................................................................... 10
Nov 25 Case Prep Only.................................................................................................... 10
Dec 2 Case Prep Only ...................................................................................................... 10
Dec 5 Final Project Due ................................................................................................... 10
All assignments except the final exam are GROUP assignment
 E-mail the assignments to sayan@case.edu Sub: 499
 The document should be labeled as Assignment #-Group x
 All the group members should be listed in the document.
 Individual assignments/exams should be labeled as LAST Name- First Name. Exam 1 (or
whatever is appropriate)
 Failure to follow instructions indicates a lack of thoroughness to me.
4
Course Introduction
Aug 26 Case
Prep Only
Readings:
Course Introduction Power Point and
notes
Sept 2
Clarity &
Trade-Offs
Group Formation and Project
Description
Short Case
Preparation Questions
1.
1.
2.
What you need
to do
Objectives
3.
Southwest, Continental and
United Express
Updates will be either handed out
or described in class
JetBlue (may be pushed to next
class)
2.
3.
What you can
do –
Capabilities
4.
5.
6.
Imagine you are the CEO of Southwest. What few
metric(s) would you look at first thing in the
morning? These should be your core objectives.
Consider the value chain of Southwest. Which
part (critical capabilities) of the value chain is it
taking profits?
What trade-offs is Southwest making?
a. For example, most airlines outsource
maintenance. Is Southwest doing the
right thing by having its own
maintenance?
What is the limit to Southwest’s strategies? For
example:
a. Should Southwest fly long-haul routes?
Why did Continental fail to adapt to Southwest’s
business model
a. What were its competitive objectives?
b. What were its core objectives?
What is United doing different from Continental?
Can it succeed?
Preparation Questions
1.
2.
3.
Did JetBlue have the same competitive and core
objectives as Southwest for their short haul
flights?
How are JetBlue’s capabilities (activities and
resources) different/similar to that of Southwest?
Who would you believe has the advantage in a
head-to-head confrontation? What are the critical
activities that will determine the outcome?
5
Discussion Board
Sep 9
Project
Proposal Due
E-mail and upload Project Proposal– See Project
Document for details
Short Case
Sept 9
Clarity &
Trade-Offs
Developing
Capabilities
for
Competitive
Advantage
Lecture: May be moved to next
class
Readings:
Outcome to Objective Framework
Power Point and notes
Short Cases
1.
Chipotle
Exercises
Sep 16
Group
Assignment 1
Due
1.
2.
3.
4.
5.
Group 1: Pay-as-you-go auto
insurance
Group 2: Software to help OEM
vendors order automobile parts
easily - see next column.
Group 3: Kraft's single serve
Tassimo coffee maker
Group 4: Run-Flat Tires
(tires that can be driven at 50 mph
for over 100 miles with
a puncture)
Group 5: Grimsby, Ontario, look
for Barbara Beaudoin's billboard:
"Oil Change + Manicure $34.95."
Two months after Beaudoin
opened the Crossfire Spa on the
second floor of Grimsby
Chrysler-Dodge-Jeep, the spa had
to move to larger quarters.
Cases
Sep 16
Group
Assignment 2
Due





Curves Group 1
Chat Therapy Group 2
Ryan Air- free seats Group 3
Internet Radio Group 4
NBA in 3D Group 5
These exercises are designed to get you to become
comfortable with applying the concepts of a
competitive objective and a core objective
Think about the desired customer outcomes for each
of these businesses, the generic strategies and the
competitive objectives for the business. Finally,
identify the specific and measurable core objectives
that can simultaneously deliver the desired customer
outcomes and capture part of the value for the
shareholders. Of course, you have to identify the
target customer segment first.
Software Case (Group 2). One of my students with
extensive experience in the auto parts industry has
developed a software to help OEM vendors order
automobile parts easily. He mainly used contract
programmers. So the software that he has developed is
the resource and programming and marketing are the
activities. Further, at this point he was expecting only
marketing to be the ongoing activities as the
programming is over. There are plenty of takers but
what he found was that every customer needed some
modification to the software. This meant he had to
repeatedly go back to his contract programmers to
modify the software and of course he was no making
any money.
1. Email your COAR maps for these existing or
proposed business models. Be clear about the
customer outcomes
2. Please explain items in the map that is not obvious
to the reader.
6
Sep 23 Case
Prep Only
Short Cases
Preparation Questions
1.
1.
Sony Play Station
Readings:
Stalk et. al. Competing on capabilities,
HBR, 1992 (available online through
KS Library) – Just read the Wal-Mart
strategy - Use VPN (Virtual Private
Network – Ask ITG if you are not
sure of this). I am not including this
in the course packet to save you
money.
Readings
Sep 30 Case
Prep Only

Industry Analysis Parts 1 and 2
including notes.
2.
3.
4.
5.
Preparation Questions
1.
2.
Readings:
Three short cases on Industry Analysis
to go w/ lectures
3.
4.
Stalk et. al. Competing on capabilities,
HBR, 1992 (read the Medequip case -Prior to 'A new logic of growth')
Cases
Oct 7
Group
Assignment 3
Due
 How Phone Firms Lost To Cable
in Consumer Broadband Battle
 Inn Fighting: Big Hotel Chains
Strike Back Against Web Sites
 Nike vs. Footlocker - Buyer vs.
Suppler Power. Can They/Will
They?
 Cable embracing DVRs - good
idea?
 P&G Pro-Health takes on Colgate
Total
What outcomes are desired by Wal-Mart’s
customers?
Assuming that Wal-Mart has a generic strategy of
low-cost, what are its competitive and core
objectives?
What are the critical activities and key resources?
What are the risks facing Sony when they started
out?
How did they mitigate these risks?
Think about the link between the five competitive
forces and the attractiveness of a market.
How will you change your competitive objectives
based on industry analysis?
How will you change your core objectives based
on industry analysis?
How can you use Porter’s model to analyze the
Medequip case in Competing on Capabilities
a. Which (Porter) forces are critical in each of
the three segments?
b. Why did Medequip chose not to compete in
the segment with the dominant competitor?
Positioning Assignment





Phone Firms Group 1
Inn Fighting Group 2
Nike vs. Footlocker Group 3
Cable embracing DVR Group 4
P&G Pro-Health takes on Colgate Total Group 5
1. What are the critical forces in your case?
2. How has the affected firm mitigated or failed to
mitigate the critical forces?
7
Oct 7 Case
Prep Only
Case
Preparation Questions

1.

The Evolution of the Air Express
Industry
“Why Federal Express Has
Overnight Anxiety,” Business
Week, 1991
2.
3.
4.
5.
What are some of the important changes that took
place in the air-express industry (you may think of
the point in time as a way of tagging these
changes)?
Critique Fed Ex’s entry into zap mail.
How should Fed Ex respond to the entry of new
competitors?
Think about the factors that determine the
attractiveness of a market. Will these factors be the
same for an existing firm as well as a new entrant?
How should the phone companies have responded
to cable? What should they do now?
Be prepared to analyze the following time period in
terms of the growth, size and the critical forces driving
industry profitability of the Air Express industry.
1.
2.
3.
4.
5.
6.
Pre-deregulation
Deregulation prior to UPS entry (1982)
UPS entry
The development of fax technology
Industry consolidation
Globalization
Preparation Questions
Oct 14 Case
Prep Only
Case
What were the critical forces in each of these cases and
how did the different players react to these forces?
Create a separate page for your group.

1.



The Cola wars continue: 21st.
Century – HBS case
Why Coke is Falling Behind 2005
Impact of Wal-Mart on Bottler
Coke Bottlers carrying other
Beverages in 2007 Strategy
2.
3.
4.
5.
Do a 5-force, growth and size analysis of the
bottler and the concentrate segment analysis
Which is the more attractive segment?
What are the critical forces in each segment?
How did the critical forces start to change in the
1980s on?
Were some of the actions by the Cola giants, such
as buying back bottlers, a good idea?
8
Short Cases
Oct 21 Case
Prep Only
Buyer and
Supplier
Power by
Outsourcing
Innovative
Outsourcing to
exploit sweet
spots and
white spaces
1.
2.
3.
4.
5.
Preparation Questions
Lily Innocentive (Look up
Lily’s Innocentive web site)
Value America and Amazon
Cisco Outsourcing
TAL: Penney's Invisible Shirts
Supplier
FedEx Custom Critical
Readings
Reigning in Outsourcing Risk – S+B
article
1.
2.
3.
4.
5.
6.
7.
8.
Recommended Readings:
How would you apply the three types of
outsourcing risks to understand the FedEx and Lily
outsourcing strategies?
What is the difference between Value America and
Amazon’s outsourcing strategy?
In general, when should you consider outsourcing?
When is it more risky to outsource?
How would you manage the risks?
Should you consider outsourcing your core or
critical capabilities?
Can you apply the outcome to objective
framework and the related visible-invisible output
to explain Penney’s sourcing strategy?
What is Penney’s comp objective(s)? What are the
risks in this objective(s), using outsourcing?
Innocentive Redux
Oct 21 First
Draft Due
Oct 28 Take
Anywhere
Mid-Term
Exam.
Nov 4 Case
Prep Only
Mid-Term Exam- 2 hours
The Exam Questions Will Be Available at 6 pm. Answers must be emailed to me no later
than 8:05 pm.
Case
Preparation Questions
Crown Cork and Seal Company, Inc
1977, HBS case.
This is a complicated and integrative case. To
facilitate a thorough discussion, carefully read the
material from page 1 to right before the ‘packaging
revolution’ (page 5) and Crown’s strategy (page 9 to
11)
1.
2.
3.
What has led to Crown’s success in the metal can
industry?
Why have the other firms diversified out of metal
cans and not Crown?
What should Crown do for the future?
Stalk et al: Think about the three segments (bottom of
P. 64 - col 1) that Medequip identified. (Read this but
we may not have time to discuss this in class. If so, I
will get to it in my lecture).
4.
5.
Which (Porter) forces are critical in each of the
three segments?
Why did Medequip chose not to compete in the
segment with the dominant competitor?
9
Nov 11 Case
Prep Only
Nov 18 Case
Prep Only
Case
Preparation Questions
Netflix
1.
Implementation
What are the characteristics of the target market?
Using the COAR framework, how has Netflix
created a business model to deliver value in this
market and capture some of that value for its
shareholders? How is Netflix’s business model
different from its competitors such as Blockbuster?
a. Blockbuster treats its videos and DVDs as
inventory whereas Netflix amortizes this
inventory. What do these different tactics
imply for the subscription (Netflix) versus the
rental business model (Blockbuster)?
2. Utilizing Porter’s Five Forces as a framework,
describe the competitive environment of the movie
rental industry.
3. What competitive advantages exist for Netflix as
compared to Blockbuster and Wal-Mart? How
should Netflix exploit these advantages?
4. What services or product features could Netflix
add to increase its sales and subscriber base?
Preparation Questions
Case
1.
1.
2.
Adams
Final Take Home Exam Handed
Out
2.
What is the problem with Adams – poor strategy,
execution or both?
What steps will you take as Millman – your boss
wants to increase profits rapidly to justify the
takeover premium?
Case Presentation
Nov 25 Case
Prep Only
Case Presentation
Dec 2 Case
Prep Only
Dec 5 Final
Project Due
10